The Community Impact Fund (CIF) is an innovative financial tool that allows credit unions to directly support their members, employees, and communities by leveraging investment returns for mission-driven lending. By using a portion of returns from a Charitable Donation Account (CDA), credit unions can offer 0% interest Impact Loans to help financially vulnerable individuals—particularly those classified as ALICE (Asset Limited, Income Constrained, but Employed)—meet essential needs while building financial resilience.

Key Features

• 0% Interest Impact Loans – CIF funds are used to provide interest-free loans to help members cover critical expenses such as housing, transportation, medical bills, and basic necessities.
• ALICE-Focused Support – These loans specifically target households that earn too much to qualify for government assistance but struggle to afford daily living expenses.
• Incentivized Savings – As borrowers repay their interest-free loans, they are encouraged to start building emergency savings accounts at their credit union, fostering long-term financial stability.
• Sustainable & Scalable – When paired with a Charitable Donation Account (CDA), CIFs create a self-sustaining cycle of community reinvestment, ensuring ongoing financial impact.

Key Benefits for Credit Unions

• Addresses Local Financial Hardship – CIFs provide direct relief to ALICE households, supporting financial stability and strengthening the local economy.
• Member & Employee Engagement – Offering Impact Loans fosters stronger relationships with members and employees, reinforcing the credit union’s role as a trusted financial partner.
• Financial Wellness & Savings Growth – Borrowers transition from debt dependency to savings-building, improving their long-term financial security.
• Regulatory & Mission Alignment – CIFs align with credit unions’ cooperative principles and NCUA-approved charitable strategies, ensuring compliance while maximizing impact.
• Sustainable Social Impact – Unlike one-time charitable donations, CIFs create an ongoing cycle of support, continuously reinvesting in the community.

Considerations

• Investment Strategy – Credit unions must ensure CIF funding aligns with financial sustainability and long-term growth goals.
• Loan Program Management – Proper loan administration and borrower education are essential for maximizing impact and repayment success.
• Community Needs Assessment – Identifying the most pressing financial challenges for ALICE households ensures the fund is effectively targeted and impactful.

The Power of CIF & CDA Together

‍By combining a Charitable Donation Account (CDA) with a Community Impact Fund (CIF), credit unions create a holistic and scalable model for community support. This dual approach enables credit unions to increase charitable giving while directly addressing financial insecurity—all while reinforcing their core mission of "people helping people."  A CIF isn’t just an investment in financial returns—it’s an investment in people, communities, and long-term economic stability.